logo
CVS soars after fourth-quarter profit signals improvement

CVS soars after fourth-quarter profit signals improvement

Boston Globe12-02-2025

The shares rose as much as 15 percent when markets opened Wednesday in New York, their biggest intraday gain since October 1999.
CVS is trying to turn around its drugstore chain and insurance business, where profit has been hit by underpricing of plans and cuts to quality ratings that help determine payments from US health programs. Chief Executive Officer David Joyner, who took the helm in October, has said that a recovery will take years.
They company is 'encouraged' by recent conversations with the government about payment rates for Medicare Advantage, a private version of the US health program for older and disabled people, Joyner said on a conference call. Rates proposed by the government didn't take into account increased health-care use and costs, he said.
Advertisement
The company is also being pushed for change by activist investor Glenview Capital Management. Its CEO, Larry Robbins, one of four new members who have joined CVS's board, has said that the company should bring down debt.
Medical Costs
In the insurance unit, CVS spent 94.8 percent of premium revenue on medical care in the quarter, less than analysts expected. Investors prefer a lower number. However, CVS said in a separate filing that high use of medical services will continue to pressure the business.
The company pointed in particular to high costs in its business that manages care for patients on Medicaid, the US health program for the poor. States have been cutting Medicaid rolls since the pandemic, often culling healthier patients in the program while sicker patients remain.
Revenue in all major divisions — insurance, drugstores and health services — were ahead Street expectations, as was overall quarterly revenue of $97.7 billion.
Advertisement
Adjusted earnings for 2025 will be $5.75 to $6 a share, CVS said, while the average estimate of analysts surveyed by Bloomberg was $6. CVS called the guidance an 'appropriately achievable baseline' with 'opportunities for outperformance.'
Investors had expected the 2025 profit outlook to come 'comfortably below' analyst estimates, so CVS's expectation 'looks fine,' Leerink Partners analyst Michael Cherny wrote in a note to clients.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

WA Medicaid data shared with federal immigration authorities, report says
WA Medicaid data shared with federal immigration authorities, report says

Yahoo

time39 minutes ago

  • Yahoo

WA Medicaid data shared with federal immigration authorities, report says

(Photo by Michael M. Santiago/Getty Images) Washington is one of a few states whose Medicaid data has reportedly been shared with the U.S. Department of Homeland Security, which could use it to potentially track down immigrants without legal status. The shared information, including names, addresses, and social security numbers, is from California, Illinois and Washington D.C., on top of Washington state, according to the Associated Press. This comes as the Trump administration seeks to ramp up deportations. Washington provides benefits that mirror Medicaid to immigrants in the U.S. without legal authorization. Enrollment is capped based on available funding, and only state dollars are used to pay for the program. The other states with data handed over offer similar benefits. The agency that runs Washington's Medicaid program, known as Apple Health, wasn't sure 'what information was disclosed or how it may have been used.' 'We've seen the reports and are deeply concerned about the potential misuse of personal health information belonging to Washington Apple Health clients,' state Health Care Authority spokesperson Katie Pope said in an email on Friday. 'We are currently working closely with the Governor's Office and the Attorney General's Office to understand the scope of what occurred, including what data from Washington has been shared and how many individuals may have been affected,' Pope continued. As of this spring, nearly 2 million Washington residents were enrolled in Apple Health, including over 850,000 children. Medicaid, primarily funded by the federal government and run by the states, provides health insurance to low-income residents. Federal law prohibits noncitizens from accessing Medicaid, but states can shell out money for programs that cover immigrants. Washington state lawmakers this year earmarked $150 million for this purpose, enough to continue coverage for about 13,000 people. California and Illinois have moved to freeze or shut down their similar programs. Republicans in Congress have proposed reductions in federal Medicaid reimbursements for states that provide this kind of coverage to immigrants. In a statement, Assistant Secretary of Homeland Security Tricia McLaughlin said, 'President Trump consistently promised to protect Medicaid for eligible beneficiaries.' 'To keep that promise after Joe Biden flooded our country with tens of millions of illegal aliens CMS and DHS are exploring an initiative to ensure that illegal aliens are not receiving Medicaid benefits that are meant for law-abiding Americans,' McLaughlin continued. In light of a February executive order from President Donald Trump, the federal Centers for Medicare and Medicaid Services late last month announced it was reviewing state Medicaid data to ensure federal funds weren't being used on immigrants without legal status. 'Medicaid is not, and cannot be, a backdoor pathway to subsidize open borders,' Mehmet Oz, the agency's administrator, said in a statement at the time. 'States have a duty to uphold the law and protect taxpayer funds.' California, Washington and Illinois shared information about noncitizens receiving health coverage, according to the AP, citing a June 6 memo. 'Protecting the privacy of our Apple Health clients is core to our mission, and we take these concerns very seriously,' said Pope, of the Health Care Authority. 'We'll continue to coordinate with state and federal partners to determine the facts and will take appropriate action as we learn more.' The Centers for Medicare and Medicaid Services are within the Department of Health and Human Services, run by Secretary Robert F. Kennedy Jr., whose advisers ordered the Medicaid data shared with the Department of Homeland Security, the AP reported Friday. They reportedly shared the information despite pushback from federal Medicaid officials. The sharing came as federal immigration agents conducted immigration raids in California that led to protests. Trump has deployed National Guard troops and Marines in response to the demonstrations.

Battery manufacturer Powin files for bankruptcy months after landing $200M loan
Battery manufacturer Powin files for bankruptcy months after landing $200M loan

Yahoo

timean hour ago

  • Yahoo

Battery manufacturer Powin files for bankruptcy months after landing $200M loan

Battery manufacturer Powin filed for bankruptcy on Wednesday. The Oregon-based company said it has more than $300 million in debt. The Chapter 11 filing will let the company continue operating while it restructures its debt. Powin manufactured grid-scale batteries using lithium-iron-phosphate (LFP) cells from China. The company had been searching for alternative domestic suppliers, but the supply chain wasn't sufficiently mature, Jeff Waters, the company's former CEO, told Bloomberg in April. The company laid off nearly 250 employees earlier this month, and just 85 remain, less than a fifth of what it started the year with. Alongside the bankruptcy filing, Waters was replaced by Brian Krane, Powin's chief projects officer. Powin was a survivor of the first clean tech boom over a decade ago. The company was taken private in 2018, and it received $135 million in growth equity in 2022 from investors, including Energy Impact Partners, GIC, and Trilantic Energy Partners. More recently, it secured a $200 million revolving credit facility from KKR. In recent years, Powin has grown alongside the boom in grid-scale battery storage, ranked third in the U.S. in terms of installed capacity and fourth worldwide. The company did not say what spurred the sudden rise in debt, though given its reliance on Chinese LFP cells, tariffs may have played a roll.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store